Home prices likely to rise soon --- in some markets. Is yours included?
Like Chicken Little, chances are the housing sky isn't going to fall.
There's plenty of evidence, most of it being ignored, that in all but a few parts of the country where there was a lot of speculative buying, prices have already stabilized.
Deep in the easily overlooked bowels of the New York Times this week was a report from a team of economists from Columbia University and the Center for Real Estate at Wichita State University in Kansas that pooh-poohed the notion that prices are going to collapse. Using a financial model constructed from the Office of Federal Housing Enterprise price index, foreclosures, home sales, building permits and employment figures, the economic team concluded that any declines in house prices are highly likely to remain small.
And last month, PMI Mortgage Insurance Co. ranked the nation's 50 largest metro areas according to the likelihood that home prices will decline further in the next two years. Except for Las Vegas and Phoenix, the top 14 metropolitan areas for which the risk of greater declines was greater than 50 percent are all in California and Florida – where speculators went crazy. The remaining 36 areas mostly have single digit percentage risks –
a much less scary proposition. The full list is available here.
In fact, if you live in the heartland, there's lots of reason to think home prices will soon rise. PMI identifies these 14 areas as having a less than 1 percent chance that prices will decline further. The real estate market never stays still. If prices aren't going down, then they must be going up.
1. Milwaukee-Waukesha-West Allis; WI
2. Cleveland-Elyria-Mentor; OH
3. Austin-Round Rock; TX
4. Denver-Aurora; CO
5. Charlotte-Gastonia-Concord; NC-SC
6. Kansas City; MO-KS
7. Columbus; OH
8. Cincinnati-Middletown; OH-KY-IN
9. Indianapolis-Carmel; IN
10. San Antonio; TX
11. Houston-Sugar Land-Baytown; TX
12. Pittsburgh; PA
13. Dallas-Plano-Irving; TX
14. Fort Worth-Arlington; TX